The National Bank of Bahrain (NBB) has launched the Gulf region's first bitcoin investment fund, a structured product aimed at capitalizing on the rising demand for cryptocurrency among institutional investors. The fund, developed in partnership with digital asset firm ARP Digital, offers investors an innovative way to gain exposure to bitcoin while protecting their principal investment against losses, a feature designed to attract risk-averse investors.
This product, pegged to bitcoin’s performance, allows investors to profit from increases in the cryptocurrency's value up to a specified threshold, thus limiting risk without sacrificing the potential for gains. The bank announced that this approach caters specifically to those interested in bitcoin exposure but wary of the market's inherent volatility.
Though Bahrain’s crypto trading volumes are modest compared to other Gulf nations, the country has led the way in regulatory developments for digital assets. In 2019, the Central Bank of Bahrain (CBB) introduced a comprehensive legal framework to regulate crypto assets. This framework set the stage for Bahrain-based companies like Rain Financial, which became the first licensed crypto service provider in Bahrain, followed by others such as CoinMena, BitOasis, and global platform Binance, which received its license in March 2022. Most recently, Crypto.com was granted a license to operate in the country.
With the establishment of this bitcoin fund, Bahrain reinforces its role as a regional leader in cryptocurrency regulation and investment, providing a blueprint for safe and structured crypto investments in the Gulf region.
